Why Companies Still Spend Millions on Ads Despite Most People Ignoring Them

When I worked at the Genius Bar, I would regularly interact with thousands of tech enthusiasts every day. Interestingly, less than 2% of them used ad blockers. This observation raises a question: if most people ignore ads, why do companies still pour millions of dollars into advertising campaigns?

Ignoring Ads vs. Closing Them Away

While a significant portion of people simply close ads away, it is not true that everyone who sees an ad will eventually purchase the product. Effective advertising involves a detailed study of the target persona's demographics, and the appropriate media channels are chosen to deliver the ads. The saying goes, 'half of my ad spend has gone to waste. I just don’t know which half.' However, as long as the ad spend increases brand awareness and drives sales, the entire ecosystem benefits.

The Impact of Digital Advertising

In today's digital age, tracking technology allows us to minimize waste and optimize ad effectiveness significantly. I often notice that if I see an ad on TikTok for a mobile game, there's a high likelihood that I'll end up downloading it. This highlights the power of digital advertising and the importance of targeting the right audience.

The Impact of Ads on Product Perception

It is often the case that products advertised appear less attractive than those that are not. This paradox arises because ads tend to trivialize the products they promote. By repeatedly advertising a product, the ad itself can strip away any inherent credibility the product might possess. This phenomenon leads to the perception that the product is heavily marketed and, therefore, not worth the investment.

Building Brand Awareness through Continuous Advertising

The key difference between sales promotions and advertising lies in their longevity. Sales promotions have a short-term focus, while advertising is a continuous effort aimed at reinforcing both potential and actual customer awareness of the product. Over time, this repetition helps consumers get to know the product, leading to eventual purchases. Continuous advertising also plays a crucial role in building a brand. To sustain the value of a brand, companies must invest in marketing, and advertising is one of the most effective ways to do this, ensuring that their product becomes a market leader.

Global Ad Spend Statistics

According to global figures, companies spent approximately $300 billion on advertising in 2021. These figures suggest that businesses are not acting out of ignorance. Rather, they are aware of the effectiveness of advertising and can pinpoint which ads work best in which media channels. For instance, while digital ads have certainly taken a significant share, traditional forms of advertising such as television, radio, print, and outdoor ads have continued to perform effectively.

Tracking and Optimization

In the digital realm, advertisers and their agencies can track who sees an ad, who clicks on it, and who ultimately purchases. This data-driven approach allows for continuous optimization of ad campaigns, ensuring that every dollar spent is maximized for the brand's benefit. By analyzing consumer behavior and preferences, companies can tailor their advertising strategies to enhance brand awareness and consumer engagement.

Conclusion

Despite the widespread belief that most people ignore ads, the reality is that effective advertising can significantly impact brand awareness and sales. Companies recognize this and continue to invest in advertising campaigns, leveraging the power of digital tracking to optimize their efforts. As long as these campaigns drive brand awareness and lead to tangible sales, the investment remains justified.